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AJ Bell cuts fees on trio of passive multi-asset funds


AJ Bell cuts fees on three passive multi-asset funds

AJ Bell cuts fees on three passive multi-asset funds

AJ Bell has reduced charges on three of its passive multi-asset funds following a number of cost savings it has made as a result of the products growing in size.

The Passive Balanced fund, the largest portfolio, has seen its ongoing charges figure (OCF) cut to 0.4% from 0.47%, while the Passive Adventurous and Moderately Adventurous funds have seen their OCFs drop to 0.44% from 0.5%.

The firm attributed the fall in fees to its commitment to pass on cost efficiencies as the funds grow in size. This means any savings as a result of fund growth or the firm negotiating lower underlying investment costs are automatically passed back to customers through a lower OCF.

Kevin Doran, CIO at AJ Bell, commented: “It is an oddity in the fund management market that despite many costs that fund managers incur being fixed, the percentage charge that customers pay often does not decrease as the funds grow in size. 

“The approach we have taken is to fix the charge we levy to run the funds and then any cost savings we can achieve, either through efficiencies of scale or negotiating down underlying fund charges, automatically benefit customers.”

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The AJ Bell passive fund range was launched in March 2017 with OCFs capped at 0.5%.

It is made-up of six risk-rated portfolios; cautious, moderately cautious, balanced, moderately adventurous, adventurous and global growth.

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